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    Re: The Porsche Pricing Model

    fritz:
    nberry:

    Christian, bank car loans are around 2%. Its cheap money and yet you still own the car.

    FWIW, each individual situation is different and it may be that leasing in your case makes a lot of sense. I only bring up the ownership issue to give the other side of the story.

    It's probably pointless comparing leasing and outright ownership costs across national boundaries anyway, as the cost-efficiency of leasing in different tax jurisdictions might vary wildly depending on how the companies financing the leases are allowed to write off the depreciation costs of the cars against their taxes.  Smiley

    True but the issue remains the same. At least for personal car ownership, do you pay money to rent the car or to buy it? Tax considerations for lessor companies play a role in the terms of the lease but at the end of the day the lessee ends up with nothing after paying thousands and thousands of dollars.

    For business, a lease can make sense.


    Re: The Porsche Pricing Model

    nberry:
    fritz:
    nberry:

    Christian, bank car loans are around 2%. Its cheap money and yet you still own the car.

    FWIW, each individual situation is different and it may be that leasing in your case makes a lot of sense. I only bring up the ownership issue to give the other side of the story.

    It's probably pointless comparing leasing and outright ownership costs across national boundaries anyway, as the cost-efficiency of leasing in different tax jurisdictions might vary wildly depending on how the companies financing the leases are allowed to write off the depreciation costs of the cars against their taxes.  Smiley

    True but the issue remains the same. At least for personal car ownership, do you pay money to rent the car or to buy it? Tax considerations for lessor companies play a role in the terms of the lease but at the end of the day the lessee ends up with nothing after paying thousands and thousands of dollars.

    How is a lessee's position any different to an outright owner's once the car has been returned to the lessor by the former or sold to it's next owner by the latter? Both are left with nothing but memories of the car. Smiley

    In both cases they have had use of the car for a given period of time or mileage and it has cost them a certain amount, which could be calculated in terms of cash per month or cash per mile. The only way to assess who is better off is by calculating these "cash per unit of usage" figures for both modes while taking all relevant factors into account, including, for example, the fact that a lessee can be earning interest or dividends or capital gains on the money which would otherwise be tied up in the car. 


    --

    fritz


    Re: The Porsche Pricing Model

    fritz:
    nberry:
    fritz:
    nberry:

    Christian, bank car loans are around 2%. Its cheap money and yet you still own the car.

    FWIW, each individual situation is different and it may be that leasing in your case makes a lot of sense. I only bring up the ownership issue to give the other side of the story.

    It's probably pointless comparing leasing and outright ownership costs across national boundaries anyway, as the cost-efficiency of leasing in different tax jurisdictions might vary wildly depending on how the companies financing the leases are allowed to write off the depreciation costs of the cars against their taxes.  Smiley

    True but the issue remains the same. At least for personal car ownership, do you pay money to rent the car or to buy it? Tax considerations for lessor companies play a role in the terms of the lease but at the end of the day the lessee ends up with nothing after paying thousands and thousands of dollars.

    How is a lessee's position any different to an outright owner's once the car has been returned to the lessor by the former or sold to it's next owner by the latter? Both are left with nothing but memories of the car. Smiley

    In both cases they have had use of the car for a given period of time or mileage and it has cost them a certain amount, which could be calculated in terms of cash per month or cash per mile. The only way to assess who is better off is by calculating these "cash per unit of usage" figures for both modes while taking all relevant factors into account, including, for example, the fact that a lessee can be earning interest or dividends or capital gains on the money which would otherwise be tied up in the car. 

    Amen... Smiley


    --

    Suzy

     


    Re: The Porsche Pricing Model

     With ownership the sale of the car has a return since his payments or cash payout builds equity. In either case, the buyer of an owned car is getting a money back for what he/she paid into it. The lessee gets zilch, nada, nothing. Obviously there are intangibles to be taken into account but by most measures for personal car ownership, leasing especially considering residual values and restricted use is problematic.

    With bank rates so low a buyer (one bank in San Diego is advertising 1.5%) can finance the car and still use the money for investment. When he or she decides to sell, there will be a return of some of the payments.

    Ferdie, no doubt leasing for car manufacturers is an excellent sales tool. They can put people into their cars with minimal down payment as long as they can afford the monthly payments. Leases enable people who could not afford to purchase the car out right to nevertheless be able to drive and possess it. Also, as Fritz pointed out, tax laws in certain jurisdictions will enable the car manufacture to take tax benefits.


    Re: The Porsche Pricing Model

    I find the lease discussion interesting, but I seem to always have cars with way too few or way too many miles per year to achieve an efficient return.  heart


    Re: The Porsche Pricing Model

    nberry:

     With ownership the sale of the car has a return since his payments or cash payout builds equity. In either case, the buyer of an owned car is getting a money back for what he/she paid into it. The lessee gets zilch, nada, nothing. Obviously there are intangibles to be taken into account but by most measures for personal car ownership, leasing especially considering residual values and restricted use is problematic. [...]

    Ferdie, no doubt leasing for car manufacturers is an excellent sales tool. They can put people into their cars with minimal down payment as long as they can afford the monthly payments. Leases enable people who could not afford to purchase the car out right to nevertheless be able to drive and possess it. Also, as Fritz pointed out, tax laws in certain jurisdictions will enable the car manufacture to take tax benefits.


    Indeed, I agree on the second paragraph and that in itself is already an advantage for certain people. One more comment on the first paragraph since you make it appear as if one would lose far more leasing the car than purchasing. First of all, you obviously need the cash to purchase it and on these high-value cars mentioned above the loss over time is dependent on so many factors. RC´s example of selling his friend´s Turbo S provides the perfect example. All that hassle is not existent when returning the car after a lease, of course considering a mileage-based lease and not a residual-based one. Depending on the lease, the monthly payment might add up to a significantly higher value than the loss when selling the car but I highly doubt that this is the case, at least in Europe.

    One would not have to care whether the car sells well after two to four years, if you just have to return it at the end of the lease deal. I would never purchase a brand-new Mercedes S-class, Audi A7 or even certain Porsche models but always go for the lease deal. The only Porsche model that seems to hold its value very well right now is... the Porsche Cayenne Diesel. Smiley


    Re: The Porsche Pricing Model

    The best explanation for leasing is like this.

    You buy a car, and you sold the same car for a set predefined price on the same day. The difference is paid in 24, 36 etc months intervals, with a bit of interest added in. But at the end of the term, there are no hassles and headaches associate with selling a car, no worries about how the car might not worth as much as you think it should. 


    --

     


    Re: The Porsche Pricing Model

     US leases are predominately residual based. That is not to say that leasing under certain circumstances isn't the best alternative. It can be especially if for a shorter term.

    For an example, at one time Porsche had a two year lease with favorable values and money factor. One could lease a 991GT3 for two years track turn it in AND need not be concerned if the car was in an accident (gap insurance included within the lease). However, monthly payments could be steep depending on residual values.


    Re: The Porsche Pricing Model

    Whoopsy:

    The best explanation for leasing is like this.

    You buy a car, and you sold the same car for a set predefined price on the same day. The difference is paid in 24, 36 etc months intervals, with a bit of interest added in. But at the end of the term, there are no hassles and headaches associate with selling a car, no worries about how the car might not worth as much as you think it should. 

    Smiley


    --

    RC (Germany) - Rennteam Editor Porsche 991 Turbo S, Porsche Boxster S (981), BMW X3 35d (2013)


     
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